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In the world of international development, most projects try to help people ramp up production:
to grow more tomatoes, sow more corn, produce more milk, harvest more fish, plant more beans.
There’s an assumption: the more you produce the more people will buy.
The problem - the tragedy is that all too
often there’s no demand for this additional output, leaving mounds of unsold goods and
wasted opportunity.
They give us this illusion that there’s a great market out there with good prices.
So we sow the seeds, and grow the crops, and put our sweat and hard work into it. And
it’s all for nothing.
Here in Peru, USAID the US Agency for International Development is improving the lives of tens
of thousands of poor, self-employed workers by using a very different, common sense approach.
First, find what products are in demand. Then
help people produce more of those products.
We always used to go to the producer first.
Now we don’t encourage them to produce more until we know we have a buyer who will buy
the products.
Here high in the Andes, USAID does not help Roman Chipa and other alpaca farmers produce
more and better fiber from their animals until the project has located a clothing company
that needs that fiber - until actual orders are in place.
We don’t waste time. We don’t waste money.
We find people who want to buy something and people who want to sell something and then
we just bring them together.
This USAID project is all about introductions, linking companies to thousands of small suppliers
all over Peru - people who harvest the fish, grow the beans, and sweet corn, and peppers
that many businesses need to grow.
Ivan Alonso, from Spain, needed more suppliers of organic avocados.
The most important contribution the project
makes is to build trust between the small producers and the companies. We don’t
know these remote farms. The project makes sure they give us the exact quality and quantity
of product we need.
That means giving the farmers essential technical advice.
Teaching quinoa farmers how to produce a sweeter,
more nutritious grain for a new export contract. Showing dairy farmers new types of infection control
to satisfy the demands of a new milk company. Instructing those alpaca farmer on more precise
ways of shearing their animals and sorting the fibers – helping to boost incomes by
30 percent.
We’re very happy because we didn’t know how to make much profit before this. The
project taught us to bring our products together and sell as one so we can negotiate a better
price.
This strategy of getting orders first is part of a project called Poverty Reduction and
Alleviation, or PRA . In Peru, it’s linked 53,000 producers with new buyers generated
323 million in new sales, and created 87,000 new jobs
Results so impressive that other projects
have started copying this approach.
PRA is doing a fantastic job. PRA introduced a new way of joining the small producers to
the market.
Some business leaders in Peru are so enthused about this USAID initiative they are now paying
more than a third of its budget.
This project is different because it integrates public and private enterprises, international
organizations, and integrates those that have resources with those that do not have resources.
After the project connects poor farmers with
new buyers, it moves on looking for others to help; its impact often profound and lasting.
We have renewed faith that we have a good
product and we actually have a contract now to sell our product, something we never dreamed
of. The work we’ve done with our hands will now be sold in other countries. That feels
good.
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